Vairs Steel Parts produces parts for the automobile industry. The company has monthly fixed expenses of $500,000
Question:
Vair’s Steel Parts produces parts for the automobile industry. The company has monthly fixed expenses of $500,000 and a contribution margin of 80% of revenues.
Requirements
1. Compute Vair’s Steel Parts’ monthly break-even sales in dollars. Use the contribution margin ratio shortcut approach.
2. Use the contribution margin ratio to project operating income (or loss) if revenues are $700,000 and if they are $1,000,000.
3. Do the results in Requirement 2 make sense given the break-even sales you computed in Requirement 1? Explain.
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Related Book For
Managerial Accounting
ISBN: 9780135443446
4th Canadian Edition
Authors: Karen Braun, Wendy Tietz, Louis Beaubien
Question Posted: